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Blockchain and fine art:how the technology could change the art market
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Barbara Kruger,Who owns what?1991 / 2012
What a fantastic work of art!I want to buy it, but…
— Is it authentic?
— Who owned it in the past?
— Where has it been exhibited?
Typical traceability issues
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Art market needsopacity transparency&
— Lack of documentation
— Paper records
— Fragmented databases
— Information silo
— Privacy requirements
— Social media
— Online sales and auction records
— Image search
— Valuations and financing
— Museum databases
E.g., Banksy / Pest Control, a handling service acting on behalf of BANKSY that determines whether he has created a certain piece of artwork and issues a paperwork if he did.
E.g., Gerhard Richter / Website
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Size of fraudulent art market:
$6 billion annually80% of fraudulent activityis made up of forged and fake works
Fraud thrives in the absence of the ability to run real-time verification of provenance
Fraud thrives on opacity
80%$6 bln.
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80% of hesitant online art buyers* want
* According to Hiscox Online Art Trade Report
authentication certificates to become standard practice for art and collectibles sold online
more background information about the artist and the object
Fraud erodes trust,and lack of trust harms online sales
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The solution: blockchain
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The technology lies behind Bitcoin, the most popular cryptocurrency in the world
Decentralized architecture builds distributed trust
Creates permanent and immutable record of transactions
Tamper proof records secured by cryptography & timestamps
What is blockchain?
Incorruptible digital ledger originally programmed to record financial transactions.
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1
How does blockchain work?
Once information is recorded in the blockchain, it is there forever. All records share cryptographic standards and the same decentralized ledger.
Someone requests a transaction
4 The transaction is combined with other transactions to create a new block of data
3 The network validates the transaction
6 The transaction is complete
2 The requested transaction is broadcast to a peer-to-peer computer network
5 The new block is added to the existing blockchain
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The blockchain may be used anywhere
Trackingownership
Transfer assetsincluding real estate
or securities
Limitingthe voting fraud
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Applying blockchain to the art market
The blockchain distributed ledger can trace the journey of artworks. If this technology is used in the art market, all events in the lifecycle of an artwork are recorded and traceable.
Each piece is assigned a unique cryptographic ID from which its complete history can be retrieved
Certification
Provenance
Registry
+
+
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No more fragile documentation related to the provenance
and movements of a piece of art: certificates are live and endorsable
Only creators can issue certificates of authenticity. Collectors can create records and ask authorities to endorse their records.
Artist Shipper Gallery Previous owner Insurer Collector
$
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Privacy settings Social proofs via Instagram
Government ID
Domain name
Thumbprint verification and touch ID
Artists, galleries and institutions could be verified in one or more ways
Collectors are anonymous and can control privacy settings
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Benefits
Buyers get real time verification of provenance and title visibility
Auction houses and marketplaces can contribute to valuation, consignment and loan data
Collectors can register works without exposing identity
Artists control title and inventory records reducing potential for unauthorized activity
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Certificates easily customized
New certificates could support real-time verification of provenance
Before After
Certificate of Authenticity
Roy LichtensteinTitle: Les Nympheas
Year Painted: 2012
Size: 51 x 63 inch
Medium: Acrylic on canvas
_______________________
Artist Signature
This artwork is one-of-a-kind authentic, original work.All copyright and reproduction rights are reserved by the artist.
Les Nympheasby Roy Lichtenstein201251 x 63, acrylic on canvas
Current Owner023FE4J9LCOD3R287AEE675FN3AD
Blockchain Address135pFj2Kv7x115DUGgrke89GLh008g
URLhttps://www.exante.eu/...
2013-03-12 04:45:32CONFIRMED
_________________________
Artist Signature
Certificateof Authenticity
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Thank you for watching!
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